Consumer Advocate Calls Interchange Surcharge Fears Propaganda

A leading consumer activist has called fears that significant numbers of merchants might begin to surcharge credit card payments in order to recoup interchange costs the result of a “PR campaign” from Visa and MasterCard.

Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group, wrote in a blog entry that some people have been “snookered” by the campaign into being afraid that merchants would charge the surcharge, but added that US PIRG did not believe this would happen.

US PIRG doubted this would happen primarily because merchants would not want to upset their customers, Mierzwinski said.

“The threat of surcharging, which would lower credit card use (and therefore bank profits, which the banks wouldn't like) may help merchants negotiate lower swipe fees, but we simply don't think many merchants will surcharge their customers,” he wrote in the Feb. 2 entry. “In addition, 40% of all consumers live in 10 large states (California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas) that prohibit surcharging by state law. The settlement does not override these state laws.”

Mierzwinski and US PIRG are on record supporting the merchants’ side in the litigation over credit card interchange.